Tuesday, December 6, 2022
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Biden scours globe so Europe can get natural gas if Russia invades Ukraine

US has approached gas producers including Qatar, Nigeria, Egypt, Libya & companies in Algeria. EU officials say they’re discussing possible swaps of long-term gas contracts with Asian nations.

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Washington: The Biden administration and European allies are searching the world for surplus natural gas to send to Europe in the event conflict erupts over Ukraine, including approaching China about its supplies, according to people familiar with the matter.

Talks with China have been limited and haven’t yet resulted in any agreement, two of the people said. U.S. and European officials have also spoken to officials in Japan, South Korea and India about diverting supplies of gas to Europe, the people said.

Unlike oil, the global natural gas market has little spare capacity and no producer has said it can extract much more at short notice.

So the Biden team, led by the State Department’s senior adviser for energy security, Amos Hochstein, is also approaching gas consumers about forgoing deliveries that could instead be diverted to Europe.

The fear is that European allies may run short of energy should Russia invade Ukraine, an attack Russian President Vladimir Putin has repeatedly denied he’s planning. European and U.S. officials are concerned Moscow may react to any retaliatory economic sanctions in the event of conflict by cutting off or reducing natural gas flows to Europe, which is dependent on Russia for about 40% of its supplies.

Russia has massed more than 100,000 troops near Ukraine’s borders, along with tanks, artillery and supplies needed to support an invasion, according to Western officials. While insisting he doesn’t intend to invade, Putin has called for NATO to cease expansions, rule out ever admitting Ukraine and roll back forces it’s deployed in former Soviet states.

The alliance has rejected his demands but has engaged in talks with the Kremlin about its security concerns.

The White House has approached gas producers including Qatar, Nigeria, Egypt, Libya and companies operating in Algeria about increasing output should hostilities break out.

The Biden administration has also spoken with energy firms including Chevron Corp. and Exxon Mobil Corp., the people said.

President Joe Biden hosted Qatar’s leader, Sheikh Tamim bin Hamad Al Thani, at the White House on Monday, where their discussions included “ensuring the stability of global energy supplies,” according to a White House statement. The energy minister of Qatar, one of the world’s largest exporters of liquefied natural gas, said the volumes Europe would need cannot be provided by any one country.

European Union officials have said they’re discussing possible swaps of long-term gas contracts with Asian countries.

Calls to China’s National Energy Administration and National Development and Reform Commission were not answered during holiday hours. South Korea’s Ministry of Trade, Industry and Energy and Japan’s Ministry of Economy, Trade and Industry weren’t immediately available for comment.

India’s energy ministry also didn’t immediately respond to a request for comment. India’s state gas utility GAIL often sells imports it receives from the U.S. to Europe and can expedite the process in an emergency, according to a person with knowledge of the matter.

The energy ministries of Nigeria, Egypt, and Libya didn’t immediately respond to requests for comment. –Bloomberg


Also read: Joe Biden’s first year as US president has been disappointing


 

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